S&P500 heavyweights join downgrade brigade

Home Depot Inc. (HD) reported that the housing market is having a deeper impact on their business than first thought lowering it's 2007 profit guidance to a drop of between 15 - 18% down from an earlier forecast of a fall of 15%.

After taking into account the $12bn in sales contributed by the recently sold Home Depot Supply division total retail sales are expected to dip between 1% and 2%.

Comparable store sales are expected to fall by mid-single digits and the company expects its operating margin to contract by between 1.2 and 1.5 percentage points due to negative same-store sales and its continued investment in its core retail operations.


Retailer Sears Holdings Corp. (SHLD) announced that same-store sales for the nine-weeks ended July 7 fell 3.9% at domestic Kmart stores, with declines across most categories. Sears domestic same-store sales, or sales at stores open at least one year, fell 4%, with declines across most categories partially offset by increases in women's apparel and footwear.

Sears said that if the sales trends experienced during the first nine weeks of the second quarter continue through the rest of the 2Q07, which ends Aug. 4, net income will be between $1.06 and $1.32 a share. Analysts, on average, expected it to earn $2.12 for 2Q07.

Sears also said its board approved the repurchase of up to an additional $1 billion of its common shares. This authorization is on top of the $121 million worth of shares that remain available for repurchase under the company's existing repurchase program.